The National Environmental Policy Act (NEPA) requires federal agencies to take “a ‘hard look’ at the environmental consequences of proposed federal actions.”

Thus, effects analyses are at the heart of the statute. The scope of what effects must be considered under NEPA, however, has been at issue recently.

Changes under the Trump Administration

Pursuant to the deregulatory agenda of the Trump Administration, the Council of Environmental Quality (CEQ) made comprehensive changes to nearly every section of NEPA’s implementing regulations that were in effect since 1978​​.

In the relevant part, CEQ narrowed the scope of effects analyzed in the NEPA process. The final rule deleted the explicit reference to indirect effects – although the conceptual definition remained – and its examples, and curtailed the analysis to impacts that are not “remote in time, geographically remote, or the product of a lengthy causal chain” and that agencies have the “statutory authority” to prevent. With respect to cumulative effects, the rule repealed the definition altogether.

Changes under the Biden Administration

The Biden Administration took swift action to undo the 2020 modifications. Executive Order (EO) 13990 directed CEQ to review and take necessary action “to improve public health and protect our environment” through science-based decision-making processes.

The directive urges agencies “to bolster resilience to the impacts of climate change” and “advance … [and] prioritize environmental justice” in federal decision-making processes. Pursuant to the regulatory policy of the Biden Administration, CEQ has moved to restore the full breadth of reasonably foreseeable effects to be examined under NEPA.

This article examines CEQ’s proposed revisions on the definitions of indirect and cumulative effects, and suggests that CEQ needs to explicitly direct agencies to infuse climate and environmental justice considerations into the NEPA process to accomplish the policies of EO 13990.

Does Implementing the Policy of Executive Order 13990 Require CEQ to Explicitly Compel Climate and Environmental Justice Analyses?

CEQ proposes to restore the 1978 definitions of indirect and cumulative effects:

Indirect effects – effects caused by the action that are late in time or farther removed in distance but are still reasonably foreseeable. Indirect effects may include growth inducing effects and other effects related to induced changes in the pattern of land use, population density or growth rate, and related effects on air and water and other natural systems, including ecosystems.

Cumulative effects – effects resulting from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of who undertakes the other actions.

CEQ’s proposal is motivated by climate resilience and environmental justice. The agency concluded that the 2020 modifications “may have the effect of limiting the scope of NEPA analysis, with negative repercussions for environmental protection and environmental quality, including in critical areas such as climate change and environmental justice.”

The restoration of the definitions of indirect and cumulative effects, according to the agency, “would ... ensure that the NEPA process fully and fairly considers the appropriate universe of effects, such as greenhouse gas emissions that contribute to climate change and effects on communities with environmental justice concerns.”

By restoring the 1978 definitions of indirect and cumulative effects, CEQ intends to clarify that climate and environmental justice must be carefully considered under NEPA analyses. However, case law examining adequacy challenges to NEPA reviews based on climate and environmental justice considerations casts a shadow into the sufficiency of the 1978 definitions to compel climate and environmental justice analyses.

After all, the 1978 definitions do not contain an explicit reference to those effects and thus do not categorically require NEPA reviews to integrate climate and environmental justice effects analyses.

Climate Analyses under the 1978 Effects Definition

It is not entirely clear whether and to what extent the climate effects of projects’ greenhouse gas (GHG) emissions must be accounted for under NEPA.

For instance, there is split authority on whether agencies must consider the effects of project’s downstream and upstream GHG emissions.

The Ninth Circuit adopted a foreseeability analysis without narrow temporal and statutory limitations. In South Fork Band Council v. U.S. Dep’t of Interior, the court held that the climate effects of a mining project must be examined under NEPA. Specifically, the court found that the failure to consider emissions associated with the transportation and processing of the ore to be mined showed that the Bureau of Land Management “did not take the requisite hard look at the environmental impacts of the proposed project.”

Similarly, a 2020 Ninth Circuit District Court decision held that downstream and upstream emissions are foreseeable climate effects of a proposed methanol refinery and export facility. The court found that the failure to “consider reasonably foreseeably indirect cumulative effects of the project’s [GHG] emissions, like, but not limited to, increased fracking (and attendant emissions), and emissions from shipping methanol and producing olefins” abroad was arbitrary and capricious.

Further, the court categorically rejected an argument seeking to impose a jurisdictional limitation in the effects analysis, reasoning that the fact the GHG emissions are “outside [the agency’s] jurisdiction does not relieve it of its duty to take a ‘hard look’” at those impacts.

On the other hand, the D.C. Circuit foreseeability approach imposes narrow temporal and jurisdictional limitations to climate effects analyses. The court found that the 1978 definitions of effects do not compel consideration of climate effects when: (1) “the asserted linkage” between the project and its consequential effects are “too attenuated;” and (2) when the agency does not have the sole “legal authority to prevent the adverse environmental effects.”

In EarthReports Inc. v. FERC, Sierra Club v. FERC, and Sierra Club & Galveston Baykeeper v. FERC, the court held that the link between liquified natural gas (LNG) export terminal projects and associated climate effects from upstream and downstream GHG emissions were “too attenuated to be weighed in its particular NEPA analysis.”

Further, the court found that the Department of Energy’s “legal authority … to increase commodity exports of liquified natural gas” constituted an intervening action that “breaks the NEPA causal chain.”

In Sierra Club v. FERC (2017), the D.C. Circuit examined whether downstream GHG combustion-related emissions were reasonably foreseeable effects of a pipeline project designed to transport natural gas to power plants. Recognizing that effects analyses are limited by narrow temporal and statutory jurisdictional boundaries, the court held that FERC has the sole “legal authority to prevent the adverse environmental effects … of [the] pipelines it approves” and that gas combustion at power plants is not only reasonably foreseeable, but it is the “project’s entire purpose,” for which “it is just as foreseeable … that burning natural gas will release into the atmosphere the sorts of carbon compounds that contribute to climate change.”

Similarly, a D.C. Circuit District Court recently held that GHG emissions are foreseeable effects of leases for fossil fuel production and approval of pipelines that transport fossil fuels.

An interrelated legal issue arising from climate effects analyses concerns whether agencies are required to apply the social cost of carbon (SCC) methodology to assess the overall impact of projects’ GHG emissions.

Several D.C. Circuit opinions indicate that it is up to agencies to make such a determination and that those decisions are “entitled to deference.” For instance, the D.C. Circuit has found reasonable not to apply SCC due to the methodology’s “significant variation in output.”

Recently, the court reviewed whether FERC was required to apply SCC pursuant to 40 C.F.R. §1502.21 before authorizing the construction and operation of three LNG export terminals and two pipelines in Texas. In Vecinos Para El Bienestar De La Comunidad Costera v. FERC, the court held that FERC “failed to adequately analyze the impact of the projects’ greenhouse gas emissions,” reasoning that the agency arbitrarily refused to engage with the proposition that the SCC methodology is “generally accepted in the scientific community” and, thus, must be used when “information relevant to reasonably foreseeable significant adverse impacts cannot be obtained” under 40 C.F.R. § 1502.21.

The court clarified, however, that FERC is not required to use the SCC, hinting that the agency must only overcome a low explanatory deferential threshold, similar to previous decisions, as to why the methodology, or other “analytical framework,” is not applicable for purposes of § 1502.21.

Whether agencies shall consider the climate effects of proposed actions under the 1978 definitions of indirect and cumulative effects is not entirely clear. If CEQ intends to compel comprehensive climate analyses into NEPA, the definitions of indirect and cumulative effects must provide explicit signals to federal agencies.

For instance, CEQ may include impacts related to induced changes in the pattern of weather in the examples of indirect effects. Further, CEQ may add downstream and upstream GHG emissions effects of fossil fuel projects as examples of cumulative effects in its definition.

Environmental Justice Analyses under the 1978 Effects ​Definition

According to Executive Order 12898, environmental justice analyses

shall collect, maintain, and analyze information on the race, national origin, income level, and other readily accessible and appropriate information for areas surrounding facilities or sites expected to have a substantial environmental, human, health, or economic effect on the surrounding populations.

However, agencies have wide discretion to include or exclude environmental justice analyses into NEPA reviews.

Thus, courts are only able to review environmental justice analyses under arbitrariness review when the agency in question has “exercised its discretion to include the environmental justice analysis in its NEPA evaluation.” Otherwise, courts have no jurisdiction to review environmental justice analyses because the Order does “not create any right to judicial review for alleged noncompliance.”

Even when environmental justice analyses are subject to arbitrariness review, the chances of successfully challenging environmental justice analyses are slim. According to a report by the Congressional Research Service, courts have found that the environmental justice analyses at issue were arbitrary and capricious only in three instances out of 30 cases that reached the merits. This background suggests that an explicit reference to environmental justice analyses is even more pressing in this context.

To accomplish the policy of the Biden Administration, CEQ must direct agencies to consider disproportionate foreseeable effects bore by overburdened populations and the cumulative exposures disproportionately affecting overburdened populations via the definitions of indirect and cumulative effects.

Including examples into both definitions is a viable path to cement environmental justice analyses into NEPA. Otherwise, environmental justice concerns are likely to remain outside of the scope of the NEPA process.

Conclusion: The NEPA Process Can Be Instrumental

Protecting public health and the environment to tackle the climate crisis requires the permeation of climate and environmental justice considerations into government decision-making processes. The NEPA process can be instrumental in addressing climate challenges and systemic inequities as contemplated by EO 13990.

This article was originally published on the State Bar of Wisconsin’s Environmental Law Section Blog. Visit the State Bar sections or the Environmental Law Section webpages to learn more about the benefits of section membership.